Los Angeles wildfires to break US costliest record: Economic losses expected to exceed US$50 bn

California is grappling with one of the most devastating wildfire disasters in US history, as multiple blazes continue to ravage Los Angeles and surrounding areas. Officials reported on Thursday (Jan. 9) that at least 10 people have died, while more than 10,000 structures have been destroyed. The death toll is expected to rise as rescue teams search through the scorched areas. Analysts estimate the economic losses could approach US$50 billion, making it the costliest wildfire event in American history.

Morgan Stanley analyst said that the estimated economic losses have doubled since the previous day, with insured damages alone exceeding US$20 billion. Morningstar DBRS, a credit rating agency, further estimated that total insured losses could surpass US$8 billion. The total damage is expected to rise if the wildfires remain uncontrolled.

According to The Wall Street Journal, the final insured losses from natural disasters often differ significantly from initial estimates, especially when projections are made during an ongoing event. Analysts and institutions base their calculations on factors including the number of destroyed buildings, their average value, and comparisons to past wildfires. Data from insurance consultancy Aon shows that the 2018 Camp Fire in Butte County, northern California, was the most destructive wildfire in US history as of last year, with inflation-adjusted insured losses of approximately US$12.5 billion.

Los Angeles Fire Department Chief Crowley stated during a press conference on Thursday that the Pacific Palisades wildfire in western Los Angeles County had destroyed 5,300 buildings, while the Altadena wildfire in the east had consumed over 5,000 structures. Firefighters are battling at least five major wildfires in the Los Angeles area, deploying aircraft to drop water and fire retardants. Authorities have ordered more than 180,000 residents to evacuate, with an additional 200,000 warned to be ready for immediate evacuation. Looting has surged in the disaster zones, with at least 20 people arrested for theft. Approximately 400 National Guard troops have been deployed, and curfews have been imposed to maintain order.

Related News:

Photos | Wildfires ravage Los Angeles: Homes destroyed, residents flee as smoke shrouds Hollywood

Suspected arsonist arrested in Los Angeles amid Kenneth Fire evacuations